I hear so many misconceptions about lasting powers of attorney (LPAs) that it is worrying how many people fail to have LPAs in place when, in a lot of cases, they can be even more important than a will!
Do you think you don’t need an LPA because all your accounts are joint? Or because you’re married? Or because you have direct debits? Or because you’re not old and there’s no history of dementia in your family? Have a read through some of the most common questions I get asked to see for yourself if an LPA could be important for you. You might even find that you had fallen for some of the misconceptions!
"What is an LPA?"
There are two types of LPA; one for financial decisions and one for health and care decisions. These legal documents allow you to choose one or more people (known as attorneys) to make decisions on your behalf in the event that you are not able to make them yourself.
The financial LPA deals with your property and financial affairs, such as arranging the payment of bills, dealing with your investments or even selling your house. The health and care LPA deals with welfare decisions, including day-to-day matters such as what medical treatment you receive and long-term matters such as where you live and the type of care you receive. This LPA also enables you to make your specific wishes clear, for instance if you do not wish to receive life sustaining treatment in the event that you are in a vegetative state.
"I'm not old and there's no history of dementia in my family, why would I need an LPA?"
Unfortunate events happen all the time in life. Mental capacity is not limited to genetics. Many people end up needing to use LPAs where they have been in a car accident, suffered a severe allergic reaction, suffered a stroke or brain injury, or developed a mental health problem to name only few, all of which can affect mental capacity. Besides, the fact that there is no family history is by no means a bar to somebody developing some form of dementia or other mental health condition.
There are also times, at any age, when you might want your attorney to act for you under your LPA simply for convenience. Examples include where a property transaction reaches a critical point around the time when you know you’re going to be away on business, or you’re stuck abroad and you need something done, or in some cases even where you’ve reached a ripe old age with all your marbles intact but simply don’t want the hassle of certain things in life!
"Does an LPA mean I lose control of my financial and welfare decisions?"
Under an LPA for health and care decisions, your attorney is only allowed to act when you are incapable of making decisions yourself. Under an LPA for financial decisions, your attorney can act when you want or need them to. By law, under either LPA, your attorney must act in your best interests and must take into account your wishes as far as possible. You can even provide your attorney with useful guidance or particular instructions with a well drafted LPA. I will happily discuss the role of your attorney with you in depth until all your questions have been answered.
If you or anyone else suspects that an attorney is abusing their power, anybody can contact the Office of the Public Guardian at any time and their safeguarding team will investigate. You can even cancel your LPA at any time whilst you still have capacity.
"All of my accounts are joint, why would I need an LPA?"
If a joint account holder loses mental capacity, your bank is obliged to freeze a joint account, even if the account holders are married! I have seen this happen with dire effects where one spouse is left with no access at all to money sitting in their account. It may seem surprising, but it comes down to contract law - feel free to ask me about this if you want to know more!
The only way around this would be to have somebody legally authorised to act on behalf of the person who lost capacity and even a spouse cannot automatically act on behalf of their other half. You would need to have an LPA in place.
"All of my finances are organised with direct debits, why would I need an LPA?"
It is extremely unlikely that the organisation of your financial affairs will remain exactly the same for the rest of your life. From being able to shop around for more affordable house insurance to re-organising your finances completely if you needed to go into care, all sorts of things change in life. If you lost capacity and you did not have an LPA in place, at whatever age, it would be virtually impossible for your existing direct debits to allow everything to tick along without any problems for the rest of your life.
"What if I lose capacity but don’t have an LPA in place? There must be another solution!"
If you have not made an LPA, the only way that somebody could make decisions on your behalf would be to apply to the Court of Protection to become your deputy. A deputyship application is complex and generally takes at least 6 months. This will cost far more than an LPA due to the time and work involved. You may not even have a say in who becomes your deputy! Furthermore, the Court would have ongoing involvement in your affairs for the rest of your life (at an ongoing cost to you of course).
As you may know, if you die without a will your estate passes in accordance with a set of default rules based on your family tree, however, if you fail to make an LPA, there really is no recourse other than an application to the Court of Protection. Having an LPA can be more important than having a will.
"I’m still not sure it’s really necessary, what should I do?"
Feel free to call me on 0118 206 6666 or e-mail me at ja@blasermills.co.uk. I would be more than happy to discuss your personal circumstances and answer any initial questions for free and with no obligation.
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